Extension of deadlines for tax incentives. Suspension of certain tax incentives.

Tax Flash - 26/03

In the Official Gazette No. 315/29.03.2021, G.E.O. No. 19/2021 was published, setting forth either extensions of deadlines or the suspension of certain recently introduced tax incentives.

We are presenting herein below a summary of the most important amendments:

1.           Extension of certain deadlines:

  • The deadline for submitting the notification for restructuring fiscal obligations according to G.O. 6/2019 is extended to 30th of September 2021, while the effective request may be filed until 31st of January 2022, the latest.
  • The deadline for submitting the application for cancellation of late payment interest and penalties according to G.E.O. No. 69/2020 is extended until 31st of January 2022. In order to benefit from the cancellation of these obligations, eligible taxpayers would need to meet the conditions set forth by the Ordinance set forth in art. IX, letters a) - c), between 14th of May 2020 – 15th of December 2020, as well as between 1st of January 2021 – 31st of January 2022.
  • The deadline mentioned above for cancelling late payment interest and penalties for taxpayers who benefit from the rescheduling of payments is also applicable to taxpayers who obtain the rescheduling between 14th of May 2020 – 31st of January 2022, with the fulfilment of the other conditions imposed by law.

2.          Changes in the area of early-education tax incentive

  • Following the official release published on the website of the Ministry of Finance explaining the impossibility of creating a non-discriminatory framework regarding the tax incentive in connection with the early education costs incurred by taxpayers, the Emergency Ordinance practically suspends the incentive between 1st of April 2021 – 31st of December 2021.
  •  Additional clarifications were brought regarding the expenses for the functioning of the nurseries and kindergartens which are under the administration of certain taxpayers: these costs are expenses with limited deductibility, of social nature, that may be deducted up to 5% of the salary costs, according to the Labour Code.

3.          Extension of the VAT refund incentive without a prior tax audit

  • VAT reimbursements may be solved without a prior tax audit, save for the categories of taxpayers set forth by way of GEO 48/2020, until 31st of January 2022; basically, the deadline is prolonged from 31st of March 2021 up to 31st of January 2022.
  • Clarifications are provided regarding the fact that the transactions carried out in relation with United Kingdom and Northern Ireland are not included in the VIES statement, except for transactions involving dispatch of goods to and from Northern Ireland.

4.           HORECA corporate tax

Taking into account that HORECA sector continues to function under restricted conditions, the tax exemption incentive has been extended, as follows:

  • No HORECA tax will be owed for a period of 90 days starting with 1st of April 2021.
  • HORECA taxpayers will recompute the tax due for FY 2020 accordingly, by subtracting from the total number of 365 calendar days the number of 90 days for the period beginning with 1 April 2021, in addition to the number of exempted days as per the former tax incentive introduced at the end of 2020.

5.           Tax due by members of partnerships

  • For the computation of the annual tax due by each member of the partnership, the acquisition cost of the electronic fiscal cash registers put into operation in that year is distributed proportionally to the quota corresponding to the contribution of each member, according to the partnership agreement.